How much will the energy transition cost? Less than its cost today: DNV GL

Overall energy expenditure will stay approximately constant to 2050 amid the ongoing energy transition, according to DNV GL’s Energy Transition Outlook. With Gross World Product (GWP) increasing by 130% over the next 33 years, total energy expenditure is forecast to fall to less than half of its current share of GWP — from 5% to a little over 2% of GWP.

The composition of this expenditure however will shift dramatically. DNV GL estimates that fossil fuel expenditures will drop by more than half from USD3,400 billion per year today to USD1,500 billion per year in 2050. At the same time, non-fossil fuel expenditures are projected to increase more than five times from around USD 500 billion per year today to USD2,700 billion per year in 2050.

By then, renewable energy sources will make up nearly half of global energy supply as the share of fossil fuels decline from 81% currently to 52%.

Energy efficiency is also expected to make strides, doubling from an annual average of 1.3% between 2000 and 2015 to 2.7% between 2015 and 2030. As a result, while global energy demand plateaus, the global primary energy supply required to satisfy it will peak within the report’s forecast period.

DNV GL’s Energy Transition Outlook also explores the energy transition on a regional level, providing its outlook for ten regions making up the world – namely, North America, Latin America, Europe, Sub-Saharan Africa, Middle East and North Africa, North East Eurasia, China, Indian Subcontinent, Southeast Asia, and OECD Pacific.